JAMAICA | House Approves First Supplementary Estimates

Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, opens debate on the First Supplementary Estimates for the 2018/19 financial year, in the House of Representatives on October 2. At left is Minister of Industry, Commerce, Agriculture and Fisheries, Hon. Audley Shaw.

KINGSTON, Jamaica, October 4, 2018 - The House of Representatives on Tuesday approved the first Supplementary Estimates for the 2018/19 fiscal year. This means that the Government will be spending an additional $17.42 billion for this financial year.

The Estimates show that the budget has been increased from $773.68 billion to $791.11 billion.

Recurrent (housekeeping) expenses have moved from $560.04 billion to $572.46 billion, for an additional expenditure of $12.4 billion. In terms of capital (development) spending, this is proposed to be increased by $5 billion, moving from $213.64 billion to $218.64 billion.

Of the increase, $7.3 billion will go towards the Major Infrastructure Development Programme (MIDP). The additional funds are required due to faster-than-programmed project execution.

Another $7.1 billion has been set aside for a grant to local authorities to deal with the payment of arrears and current charges for street lighting.

In his remarks, Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, explained that late payment to the Jamaica Public Service (JPS) for street lighting has long characterised public finances.

He noted that substantial and increasing arears due to JPS by local government, has translated into the arrears owing by JPS to Petrojam to also increase.

“The Government has decided to address this decisively for the following reasons. The first reason is that the non-payment to Petrojam by JPS is impacting Petrojam’s ability to pay its obligations, principal of which are its tax obligations and other expenditures, as well as forcing Petrojam to seek additional financing to facilitate its operations,” Dr. Clarke said.

“As we pay the arrears to JPS, the company is expected to pay its arrears to Petrojam, and the rest of the $7.1 billion is to pay the current bills as they become due,” he added.

The Minister noted that the bill for street light on a monthly basis is just below $300 million.

“Late payment to JPS also affects the quality of street-lighting services that citizens of Jamaica experience. When the Government is in large arrears, its moral authority to demand prompt service is compromised. In conversations and negotiations with the JPS over this matter, they confirmed that there are 105,000 street lights in operation and of those, 41,798 have been converted from high-pressure sodium lights to light-emitting diode (LED) lights,” Dr. Clarke said.

He argued that reducing the arrears and keeping current with monthly payments will result in an acceleration of the conversion of the remaining street lights from high-pressure sodium to LED lights over the next 24 months.

“This is projected to lower the unit cost of street lighting, which is in the interest of the Government of Jamaica. The leadership of the JPS projects that the LED lights will result in savings of approximately 40 per cent, based on various wattages,” Dr. Clarke explained.

He also told the Lower House that the JPS has committed to getting half of the 12,000 out-of-service street lights repaired over the next few months.

In the revised budget, some $445 million will go towards enhanced security measures to support the States of Public Emergency and Zones of Special Operations; to support the establishment of the Public Safety and Traffic Enforcement Branch (PSTEB); and to improve 60 priority police locations islandwide.

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